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Ministers'
Deputies Document
prepared by the Directorate General I (Legal Affairs) GMC's ACTIVITY REPORT (1994-2000) I. A. Introduction
The Council of Europe became actively involved in the
international fight against corruption because of the obvious threat
corruption poses to the basic principles our Organisation stands for:
the rule of law, the stability of democratic institutions, human
rights and social and economic progress.
Also because corruption is a subject well-suited for
international co-operation: it is a problem shared by most, if not
all, member States and it often contains transnational elements.
However, the specificity of the Council of Europe lies in its
multidisciplinary approach, meaning that it deals with corruption from
a criminal, civil and administrative law point of view.
At the 1994 Malta Conference of the European Ministers of Justice, the
Council of Europe launched its initiative against corruption. The
Ministers considered that corruption was a serious threat to
democracy, the rule of law and human rights and that the Council of
Europe, being the pre-eminent European institution defending these
fundamental values, should respond to that threat.
Resolution n° 1 adopted at this Conference endorsed the need
for a multidisciplinary approach and recommended the setting up of a
Multidisciplinary Group on Corruption (GMC) responsible for examining
what measures could be included in a programme of action at
international level, and the possibility of drafting model laws or
codes of conduct, including international conventions, on this
subject. The importance of elaborating a follow-up mechanism to
implement the undertakings contained in such instruments was also
underlined. I. B.
Creation of the GMC
In the light of these recommendations, the Committee of Ministers agreed, in September 1994, to set up the Multidisciplinary Group on Corruption (GMC) under the joint responsibility of the European Committee on Crime Problems (CDPC) and the European Committee on Legal Co-operation (CDCJ) and invited it to examine what measures would be suitable for a programme of action at international level against corruption, to make proposals on priorities and working structures, taking due account of the work of other international organisations, and to examine the possibility of drafting model laws or codes of conduct in selected areas, including the elaboration of an international convention on this subject and a follow-up mechanism to implement undertakings contained in such instruments. The GMC started operating in March 1995. The terms of reference for the GMC, as adopted by the Committee of Ministers on 8 September 1994 following the proposals of the European Ministers of Justice, (Malta, June 1994), were as follows:
« Under the responsibility of the European Committee on Crime Problems (CDPC)
and the European Committee on Legal Co-operation (CDCJ), to examine
what measures might be suitable to be included in a programme of
action at international level against corruption.
To make proposals for the Committee of Ministers' attention
before the end of 1995 as to the appropriate priorities to be set and
the working structures, taking due account of the work of other
international organisations and bodies with a view to ensuring a
coherent and co-ordinated approach;
To examine, in particular, the possibility of drafting model
laws or codes of conduct in selected areas, including the elaboration
of an international convention on this subject, as well as the
possibility of elaborating follow-up mechanisms to implement
undertakings contained in such instruments. To examine the possibility of organising or promoting research projects, training programmes and exchange of practical experiences of corruption.» I.C.
The Programme of Action against Corruption
The Programme of Action against Corruption (PAC), prepared by
the GMC in the course of 1995, was an ambitious attempt to deal
globally with all aspects of the international fight against this
phenomenon. It defined the areas in which action appeared necessary
and provided for a multidisciplinary and comprehensive approach to
tackling corruption. In January 1996, after having taken note of the draft PAC submitted by the GMC, the Committee of Ministers invited the CDPC and the CDCJ to express their opinions thereon. Pending these opinions, interim terms of reference were given to the GMC authorising an immediate start of some of the activities provided in the draft PAC, in particular: «-
work on one or several
international instruments, -
a feasibility study on
the drawing up of a convention on civil remedies for compensation of
damage resulting from acts of corruption, -
work on a European Code
of Conduct for Public Officials, - holding of a meeting for national authorities responsible for the fight against corruption.»
In the light of the opinion of the CDPC and CDCJ, the Committee
of Ministers adopted, at the 578th meeting (November 1996)
of the Minister's Deputies, final terms of reference for the GMC as
follows: «Under the
responsibility of the European Committee on Crime Problems (CDPC) and
the European Committee on Legal Co-operation (CDCJ), -
to elaborate as a matter of priority one or more international
conventions to combat corruption, and a follow-up mechanism to
implement undertakings contained in such instruments, or any other
legal instrument in this area; -
to elaborate as a matter of priority a draft European
Code of Conduct for Public Officials; - after
consultation of the appropriate Steering Committee(s) to initiate,
organise or promote research projects, training programmes and the
exchange at national and international level of practical experiences
of corruption and the fight against it; - to
implement the other parts of the Programme of Action against
Corruption, taking into account the priorities set out therein; - to take into
account the work of other international organisations and bodies with
a view to ensuring a coherent and co-ordinated approach; - to
consult the CDCJ and/or CDPC on any draft legal text relating to
corruption and to take into account its/their views. »
All Council of Europe member States were invited to appoint
experts in the GMC. In addition, the following States were invited to
appoint observers: Australia, Belarus, Bosnia and Herzegovina, Canada,
Georgia, Holy See, Japan, Mexico, New Zealand, United States of
America. Subsequently,
Azerbaijan and Israel, in 1999 and 2000 respectively, were granted
observer status in the GMC.
In addition, the following international organisations and
bodies were empowered to
participate in the GMC's work: the Commission of the European
Communities, OECD, United Nations, ICPO-Interpol, European Bank for
Reconstruction and Development (EBRD), the World Bank. At
the 529th meeting of the Minister's Deputies (April 1998), the
Committee of Ministers approved representation of the Congress of
Local and Regional Authorities (CLRAE) at GMC meetings and its Working
Groups on matters connected with the drawing up by CLRAE of a draft
Code of Conduct of local and regional elected representatives. At the
641st meeting of the Ministers Deputies (September 1998),
the Committee of Ministers agreed to the application submitted by the
Hague Conference on Private International Law to participate as an
observer in the work of the GMC. Moreover, the Committee of Ministers
invited the GMC to hold hearings or other means of consultation, when
it appeared necessary, with Transparency International (TI), the
International Chamber of Commerce (ICC), the International Bar
Association (IBA) and the International Commission of Jurists (ICJ).
The terms of reference given to the GMC are due to expire on 31
December 2000.
In order to implement its terms of reference, the GMC initially
created three working groups: the
GMCP dealing with the criminal
law aspects of corruption, the GMCC in charge of the civil law aspects
and the GMCA whose activities were devoted to administrative and
constitutional aspects. Having reached the objectives assigned to
them, the GMCC and the GMCA ceased their activities in 1999. Moreover,
a new working group was set up in 2000, the GMCF, in charge of the
aspects linked to the fight against corruption in the funding
of political parties and electoral campaigns. Between
March 1995 and October 2000, the GMC held 22 plenary meetings, 18 GMCP
meetings, 14 GMCC meetings, 11 GMCA meetings and 4 GMCF meetings. The
GMC was chaired by Mr. DE GAETANO (Malta) until February 1998, Mr L.
SALAZAR (Italy) being the Vice-Chairman during that period. From
February 1998 to date, Mr L. SALAZAR (Italy) has been in the Chair,
assisted, from February 1998 until April 2000 by Mr. R SAMS
(United Kingdom) and, from April 2000 to date by Mrs N. CONSTANTINESCU
(Romania) as Vice-Chairpersons. The Chairpersons of the Working Groups
were ex officio members of the Bureau: Mr H. NEUDORFER
(Liechtenstein) and Mrs M.O. BAUR (France) as Chairpersons of the GMCC,
Mr L. HUGHES (United Kingdom) and Mr. C. MANQUET (Austria) as
Chairpersons of the GMCP, Mrs N. CONSTANSTINESCU as Chairperson of the
GMCA and Mr R. FREMR (Czech Republic) as Chairman of the GMCF.
In addition, Mr C. MANQUET (Austria), Mrs M.O. BAUR
(France), Mr K. STROLIGO (Slovenia), Mr S. MELI (Malta) and Mr Z.
HORVATIC (Croatia) also seated, at different times during this period,
as members of the Bureau. I. D. 21st
Conference of European Ministers of Justice (Prague, June 1997)
The GMC submitted a progress report to the 21st Conference
(Prague, June 1997) of European Ministers of Justice (see document GMC
(97) 32 R 4). On this occasion, the Ministers adopted Resolution N°
1: on the links between
corruption and organised crime, which emphasised:
«that corruption
represents a major threat to the rule of law, democracy, human rights,
fairness and social justice, hinders economic development, and
endangers the stability of democratic institutions and the moral
foundation of society ». Moreover, the Ministers declared that:
« a successful strategy
to combat corruption and organised crime requires a firm commitment by
States to join their efforts, share experiences and take common action ».
The European Ministers of Justice specifically recommended the
Committee of Ministers to:
«speed up the implementation of the Programme of Action
against corruption and, with this in mind, intensify the efforts with
a view to an early adoption of:
- a framework agreement defining common principles in the fight
against corruption to be implemented through the national legislation
and complemented, where appropriate, by additional international
instruments and structures;
a criminal law
convention providing for the co-ordinated criminalisation of
corruption offences and for enhanced co-operation in the prosecution
of such offences; “and to pursue
the work concerning the preparation of an international civil
instrument dealing, inter alia, with compensation for damage resulting
from corruption -–as well as the preparation of a model code of
conduct for public officials ». I.E.
Second Summit of the Heads of State and Government of the
member States of the Council of Europe.
At their 2nd Summit, which was held in Strasbourg on 10 - 11
October 1997, the Heads of State and Government of the member States
of the Council of Europe decided to seek common responses to the
challenges posed by corruption and organised crime. In the Action Plan
adopted on this occasion, the Heads of State and Government agreed to
promote co-operation in the fight against corruption, including its
links with organised crime and money laundering. Furthermore they
instructed the Committee of Ministers, inter alia, to adopt Guiding
principles to be applied in national legislations and practice; to
conclude rapidly the elaboration of international legal instruments,
pursuant to the Council of Europe's Programme of Action against
Corruption, and to establish without delay a suitable and efficient
mechanism for monitoring observance of the Guiding Principles and the
implementation of the above mentioned legal instruments. I.F.
The
Twenty Guiding Principles for the fight against corruption. On the basis of a draft prepared by the GMC, the Committee of Ministers, at its 101st Session, held on 6 November 1997, adopted Resolution (97) 24 on the 20 Guiding Principles for the fight against Corruption. This text calls for the adoption of a comprehensive set of measures at national level in order to implement a coherent and efficient strategy in the fight against corruption.
Besides, in
the final part of Resolution (97) 24 the Committee of Ministers:
“invited national authorities to apply these Principles in their
domestic legislation and practice;
instructed the Multidisciplinary Group on Corruption (GMC)
rapidly to complete the elaboration of international legal instruments
pursuant to the Programme of Action against Corruption;
instructed the Multidisciplinary Group on Corruption (GMC) to
submit without delay a draft text proposing the establishment of an
appropriate and efficient mechanism, under the auspices of the Council
of Europe, for monitoring observance of these Principles and the
implementation of international legal instruments to be adopted.” I.G.
The mechanism for monitoring observance by States of legal
instruments adopted in the framework of PAC – “GRECO – Group of
States against Corruption”.
On
the basis of a draft prepared by the GMC, the Committee
of Ministers, at its 102nd Session held on 5 May 1998,
adopted Resolution (98) 7 authorising the setting up of the “Group
of States against corruption – GRECO”, in the form of a Partial
and Enlarged Agreement, open
to the membership, on an equal footing, of Council of Europe member
States non-members States having participated in the elaboration of
the Agreement. Resolution (98) 7 further provided that the Agreement
setting up the GRECO would be considered as having been adopted on the
first day of the month following the receipt of the 14th
notification from a member State of the Council of Europe expressing
its will to be a member.
Consequently, on 1 May 1999, the representatives to the
Committee of Ministers of Belgium, Bulgaria, Cyprus, Estonia, Finland,
France, Germany, Greece, Iceland, Ireland, Lithuania, Luxembourg,
Romania, the Slovak Republic, Slovenia, Spain and Sweden adopted
Resolution (99) 5 establishing the Group of States against Corruption-
GRECO.
In the conclusions of the Chair of the 104th Session
of the Committee of Ministers (Budapest, 7 May 1999), the Ministers
“welcomed the entry into
force, on 1st May 1999, of the Enlarged Partial Agreement
establishing the Group of States against corruption (GRECO)…”
Since 1 May 1999, nine new States have joined GRECO, namely,
Bosnia-Herzegovina, Denmark, Georgia, Hungary, Latvia, Poland,
"The Former Yugoslav Republic of Macedonia, the United-Kingdom
and the United States of America. The aim of GRECO is to monitor the
application of the Guiding Principles for the Fight against Corruption
and the implementation of the international legal instruments adopted
in pursuance of the PAC. The only condition imposed for full
membership of the GRECO is the willingness to participate without
restrictions in mutual evaluation procedures, which entails, in
particular, agreeing to be evaluated by GRECO.
GRECO provides a flexible and efficient mechanism of monitoring
respect of undertakings in the anti-corruption field, contributing to
the development of a dynamic process to prevent and fight corruption.
The Agreement further ensured the participation in GRECO, on an equal
footing, of member States and non-member States having participated in
the elaboration of the Agreement as well as of other non-member States
having been invited to join the Agreement.
The Agreement calls for the appointment of an ad hoc
team of experts to evaluate each member in each evaluation round.
Evaluation teams – which usually consist of three experts and a
secretary – must be regarded as a corner stone of GRECO procedure,
within which they play an essential role. In particular, evaluation
teams examine replies to questionnaires, request and examine
additional information to be submitted either orally or in writing,
visit member countries for the purpose of seeking additional
information of relevance to the evaluation, and prepare draft
evaluation reports for discussion and adoption at Plenary sessions.
Following the adoption by the Statutory Committee on 5 July
1999 of a budget for the period 1 September -31 December 2000, the
GRECO held its first meeting on 4-6
October 1999. At this meeting, the GRECO adopted its Rules of
Procedure. At its 2nd meeting, on 1-3 December 1999, the
GRECO agreed the modalities of its first round of supervision
(2000-2001) and established its programme of activities for 2000. At
this meeting, GRECO also elected its President (Mr. M. GAUTHIER,
France), its Vice-President (Mr. D. KOS, Slovenia) and the members of
the Bureau (Mr. A. KARA, Hungary, Mr. M. MÖHRENSHLAGER,
Germany and Mr. B. KINNEY (United-Kingdom). At its 3rd
meeting (3-5 May 2000), the GRECO adopted the questionnaire for the
first evaluation round, approved its budgetary proposals for 2001 and
decided on the composition of evaluation teams due to operate in 2000.
The first evaluation round started on 1 January 2000 and is due
to last until 31 December 2001. Pursuant to the decisions taken by
GRECO, this round will focus on the application of Guiding Principles
3, 6 and 7. GRECO also decided that on-site visits would be conducted
to each of its members as part of the evaluation procedure. In 2000,
on-site evaluation visits have been or will be conducted to the
following members: Slovenia (September), the Slovak Republic
(September), Finland (October), Belgium (October), Georgia (October),
Spain (November), Luxembourg (November), Sweden (November), Cyprus
(December). The visit to France, originally envisaged for December
2000, will now take place in January 2001. The remaining members of
the GRECO will be hosting evaluation visits in 2001 so as to enable
the conclusion of the first evaluation round in the time frame defined
by the GRECO. The GRECO
will examine and adopt a first set of draft evaluation reports at its
4th Plenary meeting, scheduled to take place from 12 to 15
December 2000.
The GRECO Agreement also provides for the establishment of a
Statutory Committee, composed of the representatives of the Committee
of Ministers of member States having joined the GRECO and of
representatives specifically appointed for that purpose by GRECO
member countries, which are not members of the Council of Europe. This
organ is competent for adopting the budget (Article 18) and approving
the annual programme of activities (Article 8, par. 1, sub-par.
ii). The Statutory Committee has also been given other functions in
connection with evaluation procedure, such as issuing public
statements in the event of failure to observe GRECO recommendations
(Article16).
The Statutory Committee adopted on 5 July 1999 Resolution
GRECO-CS (99) 2 containing the GRECO Budget for 1999. On 14 December
1999, the Statutory Committee adopted Resolution GRECO-CS (99) 4
containing the GRECO Budget for 2000.
At its 3rd plenary meeting (May 2000), the GRECO
adopted its budgetary proposals for the year 2001, as they appear in
document GRECO (2000) 16. They will be submitted for adoption to the
Statutory Committee in December 2000.
II.
Legal instruments prepared or under preparation in the
framework of the implementation of the PAC. II.A.1 .
Criminal law Convention on Corruption
The authors of the PAC underlined that the criminalisation of
various forms of corruption at national and international level should
be viewed as a high priority for the GMC. In accordance with the
objectives established by the PAC, the Working Group on criminal
aspects of corruption (GMCP), with Mr L. HUGHES (United Kingdom) in
the Chair, undertook, in February 1996, the elaboration of the draft
Criminal Law Convention. Mr
C. MANQUET (Austria) replaced Mr HUGHES as
Chairman of the GMCP in September 1997.
The GMC started the examination of the draft submitted by the
GMCP at its 11th (November 1997) plenary meeting.
It pursued this work at its 12th (January 1998), 13th (March
1998) and 14th meetings (September 1998).
In February 1998, the GMC transmitted to the CDPC the first
reading version of the draft Convention.
The Bureau of the CDPC, having consulted in writing all Heads
of Delegation to the CDPC, formulated an opinion on this draft in
March 1998 (see Appendix II, document CDPC-BU (98) 3).
The GMC took account of the views expressed by the CDPC at its
13th meeting (March 1998) and finalised the second reading
on that occasion. In view
of the wish expressed by the CDPC to be consulted again on the final
version, the GMC agreed to transmit the second reading version of the
draft Convention to the CDPC. Moreover,
in view of the request made by the President of the Parliamentary
Assembly on 11 February 1998 to the Chairman-in-office of the
Minister's Deputies, the GMC transmitted the second reading text to
the Committee of Ministers with a view to enabling it to accede to
that request. At the 628th
meeting of the Deputies (April 1998), the Committee of Ministers
agreed to consult the Parliamentary Assembly on the draft Convention
and instructed the GMC to examine the opinions formulated by the
Assembly and by the CDPC.
At its 47th plenary Session (June 1998), the CDPC
formulated a final opinion on the draft Convention. The Parliamentary Assembly,
for its part, adopted its opinion in the third part of its 1998 Session,
in June 1998. In
conformity with its terms of reference, the GMC considered both
opinions at its 14th plenary meeting in September 1998.
On that occasion, it approved the final draft and submitted it
to the Committee of Ministers. At
its 103rd Session (November 1998), the Committee of
Ministers adopted the Criminal Law Convention on Corruption, decided
to open it for signature on 27 January 1999 and authorised the
publication of the Explanatory Report thereto.
This Convention aims at harmonising national legislation
regarding the criminalisation of corruption offences, promoting the
adoption of complementary criminal law measures and improving
international co-operation in the investigation and prosecution of
these offences.
According to the text of the Convention, the Contracting
Parties undertake to criminalise active and passive bribery of
national, foreign and international public officials, of members of
national, international and supranational parliaments and assemblies,
of national, foreign and international judges. It also provides for
the criminalisation of active and passive corruption in the private
sector, trading in influence, laundering of corruption proceeds.
In addition, the Convention deals with accounting offences and
other
substantial or procedural issues, such as jurisdiction,
sanctions and measures, liability of legal persons, setting up of
specialised authorities, co-operation among national authorities,
witness protection.
Besides, the Convention introduced a set of rules in order to
conciliate the respect for existing
treaties or arrangements on international co-operation in criminal
matters with the need to establish a specific legal basis for
co-operating in the fight against corruption, in particular in cases
where other treaties or arrangements do not apply. The Convention is a
complex and ambitious document, which provides for the criminalisation
of a broad range of corruption offences, including some which are
relatively new to many States and far reaching rules on grounds of
jurisdiction. In order to allow Contracting Parties to bring their
anti-corruption legislation progressively in line with the
requirements of the Convention whilst enabling the largest possible
number of ratifications, the Convention allows certain reservation
possibilities. However, a number of restrictions apply to any
Contracting Party making use of reservation possibilities offered by
the Convention. Thus, there is a numerus clausus of admissible reservations, enumerated in Article
37, paragraphs 1 and 2. Reservations can only be made at the time of
ratification. More importantly, the number of reservations that each
Contracting is entitled to enter is limited. Reservations have a
limited validity of 3 years and will lapse automatically if not
expressly renewed. Renewal of a reservation requires a justification
to be submitted to the GRECO, which can also request, at any time, a
Contracting Party to explain the reasons underlying the continuation
of a reservation. This
set of measures is expected to influence decisions by Contracting
Parties to enter, maintain or renew reservations. The Group of States against Corruption (GRECO) is responsible for monitoring the implementation of the Convention.
At present, 34 States have signed the Convention and 5 States
have ratified it. II.A. 2
Additional activities in the criminal field
Following the adoption by the Committee of Ministers of the
Criminal Law Convention on Corruption, a significant part of the
objectives defined by the PAC in the criminal law field were reached.
However, the Convention did not deal with all criminal law matters
covered by the PAC. It should also be underlined that during the
elaboration of this Convention, the GMC agreed to postpone
consideration of the criminalisation at international level of some
other offences related to corruption.
Therefore the GMCP, under the Chairmanship of Mr C. Manquet
(Austria), discussed during several meetings in 1999 about the
necessity of criminalising at international level other forms of
corrupt behaviour or behaviour that could be assimilated to
corruption, namely: -
illegal acquisitions of interest -
insider trading -
concussion -
illicit enrichment -
corruption of members of non-governmental organisations -
corruption of sport referees
-
buying and selling of votes
The GMCP also discussed certain aspects of criminal procedure
and international co-operation, which could possibly be the subject of
new international standards, such as: - confiscation of proceeds of crime, possibly entailing shifting the burden of proof; - extension of the material scope of the offence dealt with in article 13 of the Criminal law Convention criminalising the laundering of money originating from corruption offences; -
enforcement of foreign legal decisions of confiscation of
proceeds of crime; -
measures of ensuring the integrity of investigation; -
the duration of limitation periods for offences covered by the
Convention
While recognising the importance of most of these issues for
the fight against corruption, the discussion showed that some of them
were of a general nature and that some others could be covered by
already existing provisions in the Convention or by national law. The
GMCP felt that it would be preferable to postpone consideration of
additional standards in this area, work which could be undertaken in
the future in the light of the GRECO evaluations. The GMCP decided,
therefore, to interrupt for the time being the work on the above
listed issues.
On the other hand, the GMCP agreed, as a result
of the debate to start the drafting of an additional Protocol
to the Criminal law Convention on corruption providing for the
criminalisation of corruption in the field of arbitration. GMCP
further envisaged the possibility of extending the scope of such a
draft Protocol to cover other offences like corruption committed by
jurors.
At the close of its 18 th meeting (October 2000),
the GMCP concluded the second reading of this draft Protocol. It did
not have the time, however, to conclude the consideration of the
explanatory report thereto. The GMCP would be in a position to
transmit to the Plenary the draft Protocol accompanied with a draft
explanatory memorandum in the first months of 2001. II.
B. Civil law Convention on
Corruption.
The PAC underlined that « civil
law is directly linked to criminal and administrative law. If an
offence such as corruption is prohibited under the criminal law, a
claim for damages can be made which is based on the commission of the
criminal act. Victims might find it easier to safeguard their
interests under civil law than to use the criminal law. Similarly, if
an administration does not exercise sufficiently its supervisory
responsibilities, a claim for damages may be made » ( PAC,
p. 52). The Committee of Ministers, at the 558th meeting of the Ministers' Deputies (February 1996), invited the GMC, “to start a feasibility study on the drawing up of a convention on civil remedies for compensation for damage resulting from acts of corruption.” To that purpose, a questionnaire was circulated to the States to provide a basis for this feasibility study. On the basis of the replies received from most Council of Europe member States, the GMC finalised the feasibility study, which was submitted to the Committee of Ministers in March 1997. The study gave a complete picture of the civil law aspects of corruption, underlining in particular the reasons for or against drafting one or several international instruments on this issue. The study also showed that it was possible to conceive a number of scenarii where the use of civil law remedies might be useful against any form of corruption. The text deals with, inter alia, the following questions: - the accessibility and effectiveness of civil law remedies in general, - the determination of the main potential victims of corrupt behaviours, - the problems of evidence and of proof of the causal link between acts and damage, - the fiscal aspects of illicit payments and their relation to the distortion of competition, - the validity of contracts, - the role of auditors, - the protection of employees, - procedures (including litigation costs) and international co-operation. The GMC's Working Group on Civil Law (GMCC), Chaired by H. NEUDORFER (Liechtenstein) between 1995 and 1997 and by Mrs M.O. BAUR (France) from 1997 to 1999, prepared and transmitted the draft Civil Law Convention on Corruption in September 1998 to the GMC Plenary. The GMC examined this text at its 15th (December 1998) and 16th (February 1999) plenary meetings. The draft Convention was then transmitted to the European Committee on Legal Co-operation (CDCJ) for its opinion, and to the Committee of Ministers with a view to enabling it to consult the Parliamentary Assembly. At their 662nd meeting (March 1999), the Ministers' Deputies invited the Parliamentary Assembly to give an opinion on this text. The GMC also consulted Transparency International (TI), the International Chamber of Commerce (ICC), the International Commission of Jurists (ICJ) and the International Bar Association (IBA). After having examined at its 17th plenary meeting (June 1999) the opinions of the CDCJ (CDCJ (99) 48 Appendix III) and of the Parliamentary Assembly (Opinion 213(1999)), as well as those of Transparency International (TI) and the International Chamber of Commerce (ICC), the GMC approved, on 24 June 1999, the draft Civil Law Convention on Corruption and decided to transmit it to the Committee of Ministers for adoption. At their 22nd Conference (Chisinau, June 1999), the European Ministers of Justice adopted Resolution No. 3 on the fight against corruption, urging the Committee of Ministers to adopt the draft Convention on civil aspects of corruption and open it for signature before the end of 1999.
At the 678th meeting of the Ministers' Deputies
(September 1999), the Committee of Ministers adopted the Civil Law
Convention on Corruption, decided to open it for signature at the 105th
Session of the Committee of Ministers (November 1999) and authorised
the publication of its Explanatory Report. The Civil Law Convention requires Contracting Parties to provide in their domestic legal order for effective remedies for persons who have suffered damage as a result of corruption, in order to enable them to defend their rights and interests, including the possibility of obtaining compensation for damage. The Convention, which is divided in three Chapters (measures to be taken at a national level, international co-operation and monitoring, and final clauses), is a non-self-executing Convention. This means that States Parties will have to transpose the principles and rules contained in the Convention in their internal law, by taking into account their own particular circumstances. Therefore, States Parties, which already comply with the provisions of the Convention or have more favourable provisions, are not required to take further actions. It will be for the Group of States against Corruption (GRECO), in its monitoring activity in accordance with Article 14 of the Convention, to ensure that States Parties comply with their undertakings under the Civil Law Convention.
The Convention, which is the first attempt to define common
principles and rules at an international level in the field of civil
law and corruption, deals with the definition of corruption,
compensation for damage, liability, contributory negligence,
limitation periods, the validity of contracts, the protection of
employees, accounts and audits, the acquisition of evidence, interim
measures, international co-operation and monitoring.
It should be specifically mentioned that the Convention grants
the possibility of direct accession to the European Community and to
non-member States having participated in its elaboration.
The Convention was opened for signature on 4 November 1999 and
at present has been signed by 24 States and ratified by 2 States.
The GRECO is responsible for monitoring the implementation of
the Convention. II. C . Model Code of Conduct for Public Officials The PAC attributed to Public Administration an important responsibility in the prevention of corruption (see page 68 onwards). The Committee of Ministers, at the 554th meeting of the Ministers' Deputies (January 1996), required the GMC to elaborate a draft [European] Model Code of Conduct for Public Officials (hereafter the Code) in accordance with the PAC. However, in the course of the preparation of this text, the GMC agreed to delete the term “European” in the title of the Code in order to acknowledge the contribution of non-member States to the implementation of the PAC and to take into account the fact that some non-European States may wish to draw inspiration from this code. Further to that, the GMC agreed to give the text the form of a Recommendation of the Committee of Ministers to Member States - on codes of conduct for public officials – and include as an Appendix the Model Code of Conduct for public officials.
The GMC's Working Group on Administrative and Constitutional Law (GMCA)
prepared, with Mrs N. CONSTANTINESCU (Romania) in the Chair, a draft
Recommendation and Model Code of Conduct for public officials and
submitted these texts to the consideration of the Plenary in June
1999. The
GMC examined them at its 18th (Strasbourg, 8-10 September
1999), and 19th (Strasbourg, 8-10 December 1999) meetings,
where it concluded the second reading of the Draft Recommendation
including, as an Appendix, the model Code of Conduct for public
officials and submitted these drafts to the European Committee on
Legal Co-operation (CDCJ) for opinion.
At its 20th plenary meeting (Strasbourg, 11-13 April
2000), the GMC considered the CDCJ opinion and approved the final
draft Recommendation and transmitted it to the Committee of Ministers
for adoption. The Committee of Ministers adopted Recommendation No. (2000) 10 on Codes of Conduct for Public Officials at its 106th Session (Strasbourg, 11 May 2000) and authorised the publication of the explanatory report thereto. The Recommendation invites member States to “promote, subject to national law and the principles of public administration, the adoption of national codes of conduct for public officials based on the Model Code of conduct for public officials annexed to the Recommendation.” The Model Code is both a public document and a message addressed to every public official. It provides guidance as to how to deal with situations frequently arising in public officials' professional life: gifts, use of public resources, dealing with former public officials, etc. The Code reflects and strengthens basic member States' criminal provisions on integrity and corruption and stresses the importance of the integrity of public officials and the accountability of hierarchical superiors. It comprises three objectives: to specify the standards of integrity and conduct to be observed by public officials, to help them meet those standards and to inform the public of the conduct it is entitled to expect of public officials. The Code is so structured that it states a number of general principles before setting out more specific guidance. It starts with application and interpretation provisions, states the object of the Code and sets out the general principles. It then deals with the following specific matters: reporting breaches of the Code, conflict of interest, declaration of interests, incompatible outside interests, political or public activity, protection of the public official's privacy, gifts, reaction to improper offers, susceptibility to influence by others, misuse of official position, information held by public authorities, public and official resources, integrity checking, supervisory accountability, leaving the public service, dealing with former public officials and, finally, observance of the Code and sanctions. Thus, the Code offers guidance. It addresses public officials and members of the public. It is intended to be frequently referred to and read. It is therefore not drafted in the style of a law or regulation. Rather it offers practical advice and explanations to readers who are not necessarily learned nor legally trained. It nevertheless tries to be reasonably precise since breach of its provision could result in disciplinary proceedings.
It is noted that in adopting the provisions of the Code, a
State may need to adapt its provisions to meet the particular
requirements of the State's public service. Finally, the Group of States against Corruption (GRECO) is responsible for monitoring the implementation of the Recommendation. II. D.
Funding of political parties
Many European States have been and continue to be affected by
corruption linked to the funding of political parties and electoral
campaigns. This is a sensitive and difficult question, which affects
the functioning of democratic systems. Some countries have enacted
legislation or are in the process of enacting it in order to prevent
corruption in the funding of political parties. Several documents of the Council of Europe also underlined the necessity of elaboration of legal instruments concerning the prevention and fight against corruption in the funding of political parties. The PAC recommended to initiate work in this field (PAC, page 91) as the illegal funding of political parties constitutes a problem area regarding the fight against corruption. The Twenty Guiding Principles for the fight against corruption, incorporated in Committee of Ministers' Resolution (97) 24, underscore (Guiding Principle n° 15), the necessity “to encourage the adoption, by elected representatives, of codes of conduct and promote rules for the financing of political parties and election campaigns which deter corruption”. Finally, the participants at the Third European Conference of Specialised Services in the fight against corruption, organised in Madrid on 28-30 October 1998 under the auspices of the GMC on “Trading in influence and illegal financing of political parties” concluded that the Council of Europe should:
“Prepare common
standards with a view to the setting up of transparent systems for the
funding of political parties so as to prevent corruption and; …
Prepare a Protocol to the
Criminal Convention on Corruption providing for the co-ordinated
criminalisation of the illegal financing of political parties and the
personal and unjustified enrichment of elected representatives during
their term of office.” The GMC examined therefore the possibility of drafting international rules on the fight against corruption in the funding of political parties and electoral campaigns. The Group started by drafting of a questionnaire on the legislation and regulations concerning the funding of political parties and electoral campaigns of countries participating in the GMC's work. On the basis of a large number of collected replies, an analytical report was prepared and debated (document GMC(99)23 rev.) As a result of that debate, the GMC decided, at its 19th meeting (8-10 December 1999), to create a new Working Group to deal with the issue of prevention of corruption in the funding of political parties (GMCF) and invited it to prepare a draft instrument in this field, to be submitted for consideration to the Plenary. When setting up the GMCF, the GMC further specified that, should criminal law issues arise in the GMCF's work, the GMCP should be consulted. The GMCF held four meetings in 2000, with Mr R. FREMR (Czech Republic) in the Chair. The Group is in the process of elaborating a draft Recommendation of the Committee of Ministers to the Member States on Common Rules for the prevention of corruption in the funding of political parties and electoral campaigns. The GMCF further considered that, in view of the difficult and sensitive nature of problem area covered by such an instrument, it would be necessary to complement the Recommendation with an explanatory memorandum However, this work will not be finished before 31 December 2000, date of expiry of the terms of reference of the GMC. The GMCF would be in a position to conclude and transmit to the Plenary the draft Recommendation and the explanatory memorandum thereto in the first months of 2001. III.
Other initiatives of the Council of Europe concerning the fight
against corruption
In addition to the standard-setting and the creation of
theGRECO's monitoring mechanism, other activities have been launched
since 1994 in order to develop experience sharing, raise awareness and
provide assistance in the anti-corruption field in Council of Europe
member States. Some were implemented through the PAC whilst others
through other programmes.
III. A.
European Conferences of Specialised services in the fight against
corruption.
The PAC underlined the usefulness of exchanging experiences
between the services responsible for the fight against corruption at
national and international level (police authorities, prosecutors,
officials etc.) and considered it necessary to organise, on an annual
basis, conferences of specialised services in the fight against
corruption.
In 1996, the first Conference of Specialised Services in the
fight against corruption was organised in Strasbourg. It dealt with
the setting up and the functioning of specialised authorities,
investigation and prosecution of corruption cases, and international
co-operation in this field. The participants stressed the need to
organise such conferences on a regular basis, as these events offer a
unique opportunity for the exchanges of practical information on
national experiences and techniques in the fight against corruption
and for improving international co-operation. The conclusions of this
Conference appear as Appendix I to this document.
In 1997, the 2nd Conference of Specialised Services
in the fight against corruption was organised in Tallinn, jointly with
the Estonian authorities, to deal with the subject « Corruption
in Public Procurement ». At the close of the Conference the
participants adopted conclusions, which appear as Appendix II
to this document.
In 1998, the 3rd Conference was organised in Madrid,
in co-operation with the Spanish authorities, on the theme « Trading
in influence and the illegal funding of political parties ».
This Conference led to the adoption of conclusions, which appear as
Appendix III to the present document.
The 4th Conference, organised jointly with the
Cypriot authorities, took place in 1999 in Limassol (Cyprus) and dealt
with the subject « International
co-operation in the fight against corruption and offshore centres –
obstacles and solutions ». The conclusions adopted at this
Conference are also appended to this report as Appendix IV.
The 5th Conference, presently being organised in
co-operation with the Turkish authorities, will be held on 15-17
November 2000, in Istanbul. This Conference will deal with the subject
“ Investigating, prosecuting
and adjudicating corruption cases”. The draft programme was
approved by the GMC at its 22nd plenary meeting (October
2000)
The GMC is convinced that the Conferences of Specialised
Services are a key element of the Council of Europe anti-corruption
strategy. These events, which take place every year in a different
country, are jointly organised by the Council of Europe and the
authorities of host country. They bring together the specialised staff
in charge of struggling every day to prevent, detect, investigate,
prosecute and adjudicate corruption cases. Policemen, prosecutors,
judges put in common their experience and knowledge in relation to
topical issues related to the fight against corruption. Besides, these
Conferences provide an excellent opportunity to disseminate among
specialists the Council of Europe instruments, activities and
programmes and to gather their views on them. They also contribute to
the general effort to raise awareness about the danger of corruption and about the importance of co-operating with the
authorities primarily responsible to combat this type of criminality.
More importantly, the views, reflections and proposals of the members
of specialised services, distilled in the form of conclusions at the
end of each Conference, provide an insight into practical difficulties
and needs in the field, feed the debate about new initiatives, favour
more targeted-oriented activities, and substantially contribute to the
fight against corruption conducted by the Council of Europe or by
other organisations. III. B. Octopus
project. The Octopus project is not implemented in the framework of the PAC. However, it aims at enhancing the fight against corruption and organised crime in States in transition. The current phase of the project (“Octopus II”) is due to expire at the same time as the terms of reference of the GMC (31 December 2000). This project, initiated in 1996 by the Council of Europe and the European Commission, enabled an evaluation of the problem of corruption and organised crime and of the efficiency of counter-measures taken by the Governments of the 16 member States[1] concerned. Provisional recommendations and guidelines were formulated by Council of Europe experts for each of the States involved. Expert missions were carried out to determine the extent to which the proposed measures were appropriate to the particular circumstances of the country in question, their feasibility and an identification of potential obstacles to their implementation.
The project is now in its second phase, 1998-2000, following
the signing a new contract by the Council of Europe and the European
Commission in November 1998. Octopus II seeks to contribute to the
setting up of a legal and institutional framework enabling each of
these countries to react appropriately against these dangerous
phenomena. It thus fosters the implementation of recommendations
addressed to participating countries under the first phase of Octopus
(1996-1998). Through this project the European Union seeks to help
associated countries of Central and Eastern Europe to prepare for
accession. The Council of Europe, in turn, views Octopus II as a
contribution to the strengthening of legal and constitutional reforms,
the rule of law and democratic security in some of its more recent
member countries.
Seminars, workshops and study visits have been organised for
the benefit of police officers, prosecutors, judges and policy-makers
of beneficiary countries, dealing with a great variety of topics
connected with the fight against corruption and organised crime:
special means of investigation, criminalisation of corruption and
organised crime, setting up specialised units, liability of legal
persons, economic crime, sharing of sensitive information. These
activities are leading to the preparation of country-specific
recommendations, which will be presented at the final evaluation
Conference, scheduled in December 2000. III. C. Implementation of the Programme of action against corruption and organised crime in South-eastern Europe (PACO) in the framework of the Stability Pact for South-eastern Europe. The
first objective of the PACO Programme is to strengthen the means
within the countries of this region to fight against corruption and
organised crime. The PACO will support the implementation of the
Stability Pact Anti-Corruption Initiative (SPAI) – adopted in
Sarajevo in February 2000 – as well as the Stability Pact Initiative
against Organised Crime (SPOC) – adopted in Sofia in October 2000.
The Council of Europe played an important role in the preparation of
both these initiatives and is in charge, jointly with other
organisations, of their implementation.
On the basis of the activities already implemented in the framework of other initiatives and after a preparatory and assessment phase of actions to be carried for each of the countries of the region, the PACO programme will define for each country of the region concrete actions to be developed in the four following areas: - definition of policies in the fight against corruption, organised crime and money laundering as well as preventive measures; - strengthening of legislation; - strengthening and creation of institutions (specialised units, inter-agency co- operation and strengthening of investigative capacities). - development of regional and international co-operation in this field. Country specific work plans and sub-projects will be developed on a national basis in these four fields by way of training, exchange of information, expertise, transfer of know-how and provision of equipment. A follow up and an evaluation on the results of these actions are foreseen in the different projects.
Assessment and planning missions have already been carried out
in Bosnia and Herzegovina (December 99), in Kosovo (February 2000) and
Albania (September 2000). They provided a deeper knowledge of the
situation in the region and identified certain actions, which should
be developed quickly in the legislative field, as well as other
long-term work to be carried out. The Donors' Conference in March
2000 provided funding for the implementation of the SPAI, some of
which to be channelled through the PACO Programme. IV. Conclusions
The GMC has achieved very substantial progress in the execution
of the terms of reference given to it by the Committee of Ministers in
November 1996. In particular the PAC is now almost completely
implemented. However, the GMC is still conducting work in two
important areas, namely the complementary criminalisation of certain
forms of corrupt behaviour and the prevention of corruption in the
funding of political parties. Significant progress has already been
made in both areas and it is expected that the GMC would be in a
position to conclude this work in the near future with the submission
to the Committee of Ministers of: -
a draft Recommendation on Common Rules against corruption in
the funding of political parties and electoral campaigns, accompanied
by an Explanatory memorandum thereto (see§
II.D.); -
a draft additional Protocol to the Criminal law Convention on
Corruption, accompanied by an Explanatory memorandum thereto (see §
II. A. 2).
The GMC considered that an appropriate implementation of the
PAC would require these two current activities to be concluded. It
noted, however, that it could not do so in the time frame available to
it, i.e. before the 31 December 2000, date of expiry of the terms of
reference given by the Committee of Ministers.
Both the CDPC (in June 2000) and the Bureau of the CDCJ (in
October 2000) were made aware of the need of some additional time and
have supported the extension of the GMC's terms of reference for one
year.
In view of the aforesaid, the GMC decided to ask the Committee
of Ministers to extend for one additional year the deadline for the
execution of its terms of references, i.e. until 31 December 2001.
Moreover, for the reasons explained above (§ III.A), the GMC
was of the opinion that the Annual Conferences of Specialised Services
in the fight against corruption should be maintained as a permanent
feature of the Council of Europe's Intergovernmental Programmes of
Activities, even beyond the expiry of the GMC's terms of reference,
on 31 December 2001 if the Committee of Ministers approves the
extension requested above. The GMC underlined, in particular, that the
organisation of such conferences, possibly under the auspices of the
“Group of States against corruption –GRECO”, would enable the
Council of Europe to remain in touch with practitioners in the field,
to have a clearer insight into the impact of the instruments so far
adopted in pursuance of the PAC and to detect new needs for further
action to be undertaken in the future. Therefore the GMC invited the
Committee of Ministers to take this opinion into consideration in the
framework of the elaboration of the Council of Europe's
Intergovernmental Programme of Activities in the years to come. *** APPENDIX I First conference for law-enforcement
officers specialised
in the fight against corruption Strasbourg,
24-25 April 1996 Conclusions
and recommendations
of
the General Rapporteur (Mr
Lorenzo SALAZAR, Italy)
The first Conference for Law Enforcement Officers specialised
in the fight against corruption was convened in Strasbourg on 24 and
25 April 1996 by the Council of Europe's Directorate of Legal Affairs.
The Multidisciplinary Group on Corruption (GMC) had, in
September 1995, expressed a wish to hold this meeting.
Authorisation for it to take place had been given by the
Ministers' Deputies on 10 January 1996 in a decision relating to the
partial implementation of the draft Programme of Action against
Corruption (the final adoption of which was to be discussed by the
Committee of Ministers in September/October 1996).
The General Rapporteur welcomed the fact that the Conference
was so well attended by practitioners from more than 40 countries and
that the reports and contributions were of such high quality.
He was particularly grateful for the contribution from the
representatives of Transparency International (TI) and the
International Bar Association who, had been invited to attend a
meeting within the framework of the GMC for the first time, pending
final consideration of their applications for observer status.
The General Rapporteur noted that in the view of many speakers
there continued to be a high degree of international corruption at
inter-European level; it was not restricted to relations with
developing countries. In
his opinion, this was one more reason why the Council of Europe could
be regarded as a particularly well-placed forum to organise the
international fight against corruption. I.
The setting up and functioning of specialised authorities
The particular features of corruption as a crime call for
specific prevention, investigation and prosecution techniques (see the
second theme of the Conference below).
This fact has undoubted repercussions for the authorities
responsible for the fight against corruption.
They must have personnel with specific knowledge and skills,
have rapid access to information held by a wide variety of national
authorities (customs, tax departments, police, courts, etc), be able
to use adequate means of investigation, take immediate action to
obtain or retain evidence, be able to offer greater protection to
witnesses, etc. Above
all, the bodies responsible for the fight against corruption should
have the assurance that those involved in corruption or their
associates will not be able to obstruct their activities.
Recommendations: 1.
Corruption is a phenomenon the prevention, investigation and
prosecution of which need to be approached on numerous levels, using
specific knowledge and skills from a variety of fields (law, finance,
economics, accounting, civil engineers, etc).
Each state should therefore have experts specialised in the
fight against corruption. They should be of a sufficient number and be given
appropriate material resources. 2.
Specialisation may take a number of forms: the specialisation
of a number of police officers, judges, prosecutors and administrators
or of bodies or units specially entrusted with (several aspects of)
the fight against corruption. However,
it would not seem advisable to make one single body exclusively
responsible for the fight against corruption. 3.
The powers available to the specialised units or individuals
must be relatively broad and include right of access to all
information and files which could be of value to the fight against
corruption. Compartmentalisation
of departments (customs, tax, judiciary, etc) is detrimental. 4.
Officers responsible for the fight against corruption ‑
because of their personal specialisation or because they are part of a
specialised unit ‑ must be shielded from all political, economic
or personal pressures; the status of the judiciary may often guarantee
the required independence, which is less probable in the case of staff
in administrative authorities. However, those responsible for the fight against corruption
must accept strict integrity controls on their income, assets,
privileges accorded to their families, etc. II.
Special features of the investigation and the prosecution of
corruption cases
As offences linked to corruption are by their very nature
consensual and based on mutual interest and solidarity, it is often
difficult to obtain evidence. Identification
of the victim(s) is not always straightforward; in many cases, in
addition to the state, commercial competitors may also suffer in the
attribution of public procurement.
The victims and, generally speaking, those who have information
on instances of corruption often do not notify the police, primarily
because this would often incriminate them themselves, or because they
fear possible reprisals or other adverse consequences.
One might therefore envisage adopting measures which would
encourage co-operation by these people, by offering immunity in cases
of complicity in an offence, or by offering protection against
reprisals resulting from their having informed.
It might also prove possible to find a number of inducements
such as rewards or career advancement.
Other options might be to use techniques which have already
been successfully employed in relation to other categories of offence,
such as the use of informers and reformed offenders; the experience of
some legal systems which have accepted the possibility of
"negotiating" prosecutions, convictions or sentences in
exchange for information or agreement to be a witness is worth careful
consideration. If a
reformed offender can also be encouraged to act as a witness at a
trial, he or she must subsequently be afforded protection.
Witnesses and informers may also need similar protection.
Money laundering is closely linked to corruption, although a
clear distinction has to be made between them.
Some laundering techniques, eg the setting up of funds outside
the balance sheet ("slush funds"), are often used in
corruption to pay for bribes. It
is often very difficult to detect such bribes.
Making the setting up of slush funds an autonomous criminal
offence, which is already the case in many countries, albeit under a
different legal qualification, would, inter
alia, enable certain cases of corruption to be prosecuted as money
laundering (or receiving of stolen goods), pending the intervention of
criminal law. Indeed, in
accordance with the 1990 Convention on Laundering, Search, Seizure and
Confiscation of the Proceeds from Crime (ETS No 141), any act aimed at
recycling the proceeds of a predicate offence, which in this case is
the setting up of secret funds, is classified as money laundering.
Making such activity a criminal offence in this way could also
make it possible to use, as part of the fight against corruption,
certain well-known laundering prevention measures, in particular the
obligation to inform the competent authorities of any suspicious
transaction and identify customers and beneficial owners. Introducing
a general obligation of information on auditors and supervisory
authorities, together with a similar obligation in respect of money
laundering would seem to offer a possible solution.
In accordance with the recommendations adopted by the FATF
(Financial Action Task Force on Money Laundering), the authorities in
member states should also have available all the resources necessary
to conduct financial enquiries to obtain information on unjustified
income of suspect individuals and the assets, accounting practices and
financial transactions of national and foreign companies.
In any event, it is essential that the bodies responsible for
investigating corruption cases have appropriate legal instruments
permitting them to be able to seize the proceeds of corruption and
relevant evidence, including for the purposes of international
co-operation.
Recommendations: 1.
Authorities should have effective resources and techniques to
investigate corruption crimes, including those enabling them to
challenge suspects' unjustified income. 2.
Appropriate measures must be taken to encourage notification of
instances of corruption by victims or other individuals having
relevant information, providing, where necessary, appropriate
protection against the negative consequences of such notification. 3.
Although money laundering and corruption are separate
phenomena, it is appropriate to bear in mind the importance of
measures to combat money laundering in the fight against corruption. 4.
Given that the setting up of slush funds is a frequent element
in the preparation of corruption, it should be made an autonomous
criminal offence in the criminal code of member states, becoming, as
defined in the Laundering Convention, a predicate offence in the crime
of money laundering. III.
Improving international co-operation in the fight against
corruption
Recommendations: 1.
Close and active international co-operation is essential in
order to improve the effectiveness of measures taken by national
authorities to combat corruption.
To this end, it is necessary to simplify international
co-operation procedures, to give a satisfactory response to the letter
and the spirit of the request and to establish direct contacts between
the competent national structures.
Effective international co-operation also presupposes the rapid
execution of letters rogatory and other requests for assistance, while
respecting fundamental rights of the individual.
Possible rights of appeal, in particular those provided for in
the requested State, should not become an obstacle to an efficient and
rapid international co-operation. Spontaneous transmission of information concerning facts
indicating corruption should be encouraged. 2.
Harmonisation of criminal law in the member states or, at
least, a closer convergence of certain national legal concepts,
preferably through a binding international instrument, would help
remove certain obstacles to international co-operation.
In this regard, it is essential to make in a co-ordinated way
the corruption of foreign public servants and of international civil
servants a criminal offence. This
problem (together with the one concerning the tax deductibility of
bribes paid abroad) remains in the focus of the international
discussions. International corruption between private entities could
also be taken into account, at least for the purposes of international
co-operation. 3.
The international instruments drawn up at the Council of Europe
relating to international co-operation, in particular the 1990
Convention on Laundering, Search, Seizure and Confiscation of the
Proceeds from Crime (ETS No 141), the 1959 European Convention on
Mutual Assistance in Criminal Matters (ETS No 30) and the 1957
Convention on Extradition (ETS No 24), should not only be signed and
ratified by all member states as soon as possible but also be brought
to the attention of practitioners who should also use all
possibilities of them. The crime of corruption should not remain
outside the scope of these conventions, especially with regard to its
political nature. 4.
Since some European conventions on international co-operation
are founded on the concept of dual criminal liability, it would be
appropriate to consider how this requirement could be relaxed for
certain corruption offences. Indeed,
it could be examined in the framework of the drafting of an
international instrument in the matter, to draw up a list of offences,
considered among the member states of the Council of Europe and the
OECD as able to satisfy this requirement for the purposes of
international co-operation. ***
The General Rapporteur welcomed the initiative to produce and
keep updated an information document on bodies specialised in the
fight against corruption (and money laundering) in the countries
participating in the Multidisciplinary Group on Corruption (GMC).
Their details and information collected on their legal base,
responsibilities, etc would be most useful for establishing direct
contacts between them.
The General Rapporteur also noted the participants'
satisfaction with this first Council of Europe conference for law
enforcement for officers specialised in the fight against corruption
which helped update information on national techniques to fight
corruption and on how to improve international co-operation.
Accordingly, he felt it would be highly advisable to organise
similar conferences at regular intervals in the future, in accordance
with the GMC's draft programme of action against corruption. APPENDIX
II Second
European Conference of Specialised Services in the
Fight against Corruption (Tallinn,
27-29 October 1997) Corruption
in Public Procurement
Conclusions by Mr
Castresana
General Rapporteur
Over the last few decades corruption has changed its
characteristics; its presence has increased in public administration,
gone beyond that involving individual conduct and become a source of
systematic loss to public budgets. Few activities create greater temptations or offer more
opportunities for bribery and extortion than public sector
procurement. Every level
of government and every kind of government organisation purchases
goods and services. This makes public procurement, where vast amounts of public
expenditure come under the control of individual public servants, a
prominent target for corruption. Corruption
in this field results in an escalation of costs of projects, leads to
sub-standard performance, cost-inefficient and unnecessary selection
and execution of projects. Even more seriously, it results, in a deterioration of the
ethical standards in society and in a loss of citizens' confidence in
public service and democratic institutions. In
view of the aforesaid, the participants concluded that: 1.
Prevention and public awareness are key elements of an
effective long-lasting strategy of enforcement and education against
corruption in public procurement.
Experience shows that an adequately remunerated civil service
is by and large more likely to be immune to corruption.
Preventive measures such as: splitting of decision-making,
requiring important decisions to be taken by more than one person, job
rotation in critical posts, regular declaration of assets by more
senior officials and subsequent inspection of the information provided
have proven effective. 2.
Public procurement procedures should be cost-efficient, fair
and impartial, transparent and efficient.
They should render corruption as difficult as possible,
facilitate detection and pay particular attention to specific
vulnerable points. In
particular: a)
specifications and designs should be clear, precise, accessible
and non-discriminatory, b)
decision-making criteria should be as objective as possible and
discretion reduced to the minimum extent possible, c)
opening of bids should, as a general rule, be in public
allowing, at least, the presence of public authorities and bidders
and, preferably, the participation of outside interested bodies
(consumer or professional associations, media, etc), d)
as far as possible, awarding should not be made by an individual
person, but by committees, where evaluations are conducted
collectively with independence and freedom from any undue interference
by the administration or the private sector, e)
where free competition and publicity are not possible due to the very
nature of the contract (e.g. security or defense expenditure)
alternative means of control should be devised in order to avoid
corruption, f)
those responsible for public procurement should be held accountable
for their decisions, g)
independent commissions should be established to review the
correctness of public procurement procedures; bidders and other
interested persons should be entitled to file complaints before such
commissions, h)
public administrations should provide adequate external and internal
control mechanisms and auditing procedures.
Among the services responsible for these controls and
procedures sharing of information and co-ordination is essential. 3.
The law should deal appropriately with the consequences of
public procurement contracts awarded through corruption, particularly
by making provision for: a)
loss of contract b)
forfeiture of bid security c)
liability for damages d)
black-listings of companies and managers involved in corrupt
practices. 4.
Consistent and firm prosecution and punishment of serious
corruption offences is a most effective deterrent.
This can only be achieved if judges and prosecutors enjoy
independence and impartiality in the exercise of their functions, are
properly trained for combating this type of criminal behaviour and
have sufficient means and resources to achieve the objective. 5.
All those involved illegally in corruption share a common
interest in remaining silent. Therefore,
in order to facilitate the gathering of evidence, provisions should be
put in place to allow information from the public to be given to the
authorities and the law should provide for special investigative means
(e.g.: wire-tapping, video-recording, bugs, etc.).
In addition, provision should be made for financial tracing,
obtaining banking evidence and property searches.
These have proved among the most suitable means to unveil
criminal corrupt practices. 6.
Persons indicted on corruption offences should not benefit from
any procedural privileges and should be subject to the general rules
of procedure as regards provisional measures, including custody and
seizure. Immunity of
members of parliament, government and other state officials should be
reduced to what is strictly necessary for the exercise of their
functions and should not be allowed to serve as a personal privilege. 7.
An appropriate system of protection for witnesses and other
persons co-operating with the judicial authorities should be
introduced, including not only an appropriate legal framework, but
also the financial resources needed to achieve the result. In this respect, the Council of Europe should consider
accelerating the implementation of its Programme of Action against
Corruption in this field. 8.
Provision should be made for the granting of immunity or the
adequate reduction of penalties in respect of persons charged with
corruption offences who contribute to the investigation, disclosure or
prevention of crime. 9.
Traditional criminal offences such as bribery may not allow in
some cases, the prosecution of certain types of modern corruption.
Therefore, legislative bodies should consider introducing new
criminal offences such as: bribery of foreign officials, illegal use
of confidential information; illegal use of official power or position
for personal enrichment, possession of unexplained wealth by public
officials; seeking or receiving gifts by public officials, trading in
influence, setting up of
slush funds and the accounting offences resulting therefrom, etc. 10.
In addition, serious corruption offences should lead to severe
punishment including effective deprivation of liberty.
Confiscation of proceeds from corruption should be generally
provided for. The
possibility of reversing the burden of proof should be considered in
some cases, as well as imposing on banks and other financial
institutions, obligations similar to those which apply to money
laundering of the proceeds of crime.
Criminal liability of companies or other legal entities should
be considered in order to ensure efficient prosecution of corruption
in public procurement. 11.
Due account should be taken of the growing implications, in
some countries, of organised crime in public procurement corruption
where procurement is obtained not only by means of bribes but also
extortion and other crimes. 12.
Experience shows that corruption in public procurement is often
linked to the illegal financing of political parties and electoral
campaigns. This results
in serious waste of public resources and distorts the proper
functioning of democratic institutions.
The Council of Europe, as the institution entrusted with the
task of defending and promoting democracy and the rule of law in
Europe, should devote attention to this question with a view to
preparing European standards in this field and considering whether the
most serious forms of improper financing of political parties and
electoral campaigns should be criminalised. 13.
All necessary measures should be taken in order to avoid tax
havens assisting in the perpetration of corruption, or providing a
safe base to hide the benefits thereof by preventing their seizure.
In conformity with the relevant international instruments, the
legal framework of tax havens should enable their authorities to
comply with requests for mutual legal assistance from foreign
authorities investigating corruption cases, namely: to disclose
account holder's identity; freeze their accounts or assets and lift
the corporate veil of companies. 14.
Fiscal legislation should not allow the tax deductibility of
expenses connected with corruption.
Payments made to front companies or persons domiciled in tax
havens should be considered suspicious unless their identity is clear
from the records. 15.
In accordance with U.N. General Assembly Declaration against
Corruption and Bribery in International Commercial Transactions of 16
December 1996, States should ensure that full co-operation is extended
to governments that seek information on criminal investigations or
other legal proceedings relating to corruption, bribery or other
illicit practices. 16.
International exchange of data and experience should be pursued
especially between multi-lateral actors. This co-operation would
benefit from the establishment of a database accessible to all
professional organisations. 17.
The
European Convention on Judicial Assistance in Criminal Matters should
be modernised in order to efficiently respond to the transnational
features of modern corruption. The
Council of Europe should consider the revision of this convention to
allow direct communications between judicial authorities thus
eliminating the requirement to transmit the request for judicial
assistance through governments. Refusal of such requests by the government should be
permitted only in exceptional cases. APPENDIX III Third
European Conference of Specialised Services in
the Fight against Corruption (Madrid,
28-30 October 1998) Trading
in influence and illegal financing of political parties Conclusions By
Mr. Van Ruymbeke General
Rapporteur
Political parties play an essential role in democratic systems.
Their operation requires appropriate
resources whilst electoral campaigns have become expensive. Faced with
increasing expenses political parties are unable to live only on their
members' fees and have to solicit and accept donations. Trading in
influence has thus developed. In order to remedy to this situation,
which is detrimental to the rule of law and to democracy, it is
necessary to ensure that political parties are financed in a wholly
transparent manner. Expenditure control and public funding are
preconditions for the fight against trading in influence. However, corruption having an increasingly international dimension, the adoption of purely domestic measures is no longer sufficient. Those engaged in corruption make more frequently use of shell companies domiciled in far away islands or territories with bank accounts in financial or tax havens often situated in Europe. Money moves from an off-shore centre to another before being laundered or used for illegal purposes. Proceeds from corruption are channelled through these protected centres where they produce benefits in an atmosphere mixing criminal and legal economies.
Whereas money and offenders circulate more and more freely,
judges and authorities responsible for carrying out investigations are
limited by national borders. They are faced with obstacles that can be
insurmountable due to protecting legislation, lengthy procedures and
bank secrecy in financial and tax havens.
It is therefore necessary to take measures at European level in
order to ensure transparent transactions and capital movements and to
enable judges and competent authorities to carry out investigations
beyond national borders. Such investigations should not be delayed
either by means of the internal appeal system of the requested State
or bank secrecy. The participants took note with satisfaction of the imminent adoption by the Council of Europe of the Criminal Convention on Corruption which provides for a common definition of trading in influence, corruption and related offences. In view of the aforesaid, Participants
concluded that at national level it was necessary to: 1. Impose an upper limit on political parties' and election campaigns' expenditure. 2. Provide, within reasonable limits, for the public funding of political parties, taking into account their level of representation. 3. Strictly regulate or even prohibit company donations to political parties. 4. Prohibit donations from unidentified sources subject to respect for the right to privacy as guaranteed by the European Convention on Human Rights. 5. Ensure that the political parties' resources and expenditure are transparent and their accounts made public. 6. Require holders of elective national or regional office to declare their assets to an independent authority at the time of taking up their functions and at the time leaving office. 7. Set up one or several independent authorities with real investigation means, responsible for efficiently controlling political parties' accounts, electoral expenditure and elected representatives assets, and, in case of breach of the relevant rules, for imposing, or triggering the procedure leading to, adequate sanctions (fines, nullity of elections, etc). 8. Criminalise illegal financing of political parties. 9. Consider the possibility of criminalising the personal enrichment of elected representatives during their term of office if the origin of the enrichment cannot be justified. 10. Eliminate the tax-deductibility for illicit payments relating to export contracts. 11. Limit the holding of several political offices. 12. Regulate the simultaneous holding of elective office and responsibilities in the private sector so as to prevent conflicts of interest. 13. Compel financial institutions to notify public authorities of any suspicious cash deposits or withdrawals, and of any suspicious transfer from or to companies or accounts in financial havens. 14. Optimise existing channels for exchanging information between competent authorities for investigating or prosecuting corruption offences in different European States. Participants
invited the Council of Europe to: 15. Undertake the comparative analyses of the different systems for funding political parties and electoral campaigns and establish a set of good practices in the fight against corruption in this field. 16. Prepare common standards with a view to the setting up of transparent systems for the funding of political parties so as to prevent corruption. 17. Adopt without delay a Model Code of Conduct for Public Officials. 18. Promote the adoption of Codes of conduct for elected representatives. 19. Prepare a Protocol to the Criminal Convention on Corruption providing for the co-ordinated criminalisation of the illegal financing of political parties and the personal and unjustified enrichment of elected representatives during their term of office. 20. Develop international co-operation among judicial and other competent authorities, namely by: · Complementing the European Convention on mutual legal assistance in criminal matters by means of a Protocol providing for swifter and direct communication between European judges and the granting without delay of the co-operation required; · Complementing the European Convention on the laundering, search, seizure and confiscation of proceeds from crime by means of a Protocol allowing for the immediate seizure of proceeds particularly those resulting from corruption offences; · Implementing without delay the Agreement setting up the “Group of States against Corruption – GRECO” responsible for monitoring application of the Guiding Principles in the Fight against Corruption and compliance with undertakings resulting from legal instruments adopted in pursuance of the Programme of Action against Corruption and in particular from the Criminal Law Convention on Corruption. · Examining the obstacles to international co-operation against corruption that arise from the protecting legislation and bank secrecy in force in certain financial havens. Moreover,
the participants supported the efforts undertaken within the European
Union with a view to: 21.
Creating, in particular by making full use, as soon as it
enters into force, of all the possibilities offered by the Treaty of
Amsterdam, a European judicial area, where judicial and other
investigating or prosecuting authorities, will be entitled to
intervene directly, applying their own rules of procedure, in the
territory of another State in association and with the assistance of
the latter State 's authorities. 22.
Developing, within the said European Judicial area, direct and
unobstructed contacts between judicial and other competent authorities
and facilitating the access of European judges to the bank accounts of
all natural and legal persons of whatever nationality in another State
without allowing the requested State to refuse on the ground that
domestic remedies are still available; 23.
Pursue the harmonisation of company law, namely by providing
the setting up of a European Register of companies accessible to the
public as well as common standards, aimed at ensuring the transparency
of company accounts and managing boards and at preventing the
anonymity of the true economic beneficiaries of such companies. APPENDIX
IV 4th
European Conference of Services Specialised in
the Fight against Corruption Limassol
(Cyprus), 20-22 October 1999 International
co-operation in the fight against corruption and offshore
financial centres: obstacles and solutions Conclusions
adopted by the Conference
following
a proposal by Professor
Ernesto SAVONA, General
Rapporteur I. General context
Like drug traffickers and other criminals, corruptors and corruptees need to disguise the illicit origin of the proceeds from criminal offences committed and resort to money laundering techniques in order to allow a future use of the laundered proceeds in the legitimate economy. The experience gained during the last decade in combating the laundering of proceeds from crime could therefore be useful in the fight against corruption.
Offshore financial centres are an element of the world economic
system. Their number and variety have increased with the globalisation
of trade and investment and the development of modern information
technologies. The use made of their services by the different actors
in economic life has risen dramatically and numerous financial
institutions in Council of Europe member States – including States
in transition - have in fact established their own subsidiaries in
off-shore centres. Offshore centres are jurisdictions where non-residents have the possibility of establishing companies and using financial services for activities outside the centre, offering in most cases advantages such as low taxation rates and/or under-regulation in areas like company, financial, administrative or currency law. The services they offer vary and competition is developing between different offshore centres. Some onshore countries have even found it useful to open offshore zones inside their own jurisdiction. Therefore the very notion of an offshore centre could be misleading as it covers many different realities and legal orders. Whereas some offshore jurisdictions offer bank secrecy, confidentiality, anonymity, tax avoidance facilities and fail to provide international co-operation in criminal matters, others have introduced measures of supervision and control that easily match, or on occasion may even exceed, those that can be found in some onshore jurisdictions. The services provided by offshore centres are particularly attractive for individuals and companies involved in corruption transactions, the setting-up of slush funds, the laundering of proceeds and the creation of shell companies being facilitated by offshore environments. Experience shows that modern corruption schemes often involve the use of shell companies or bank accounts domiciled in offshore centres. Whilst corruption, organised crime and money-laundering operate already on a trans-national scale, making full use of the possibilities offered by the global financial markets, law-enforcement agencies remain, to a large extent, still confined to act within national borders and have considerable difficulties in obtaining assistance from foreign jurisdictions. This is a matter of growing international concern. Hence, there is little prospect of addressing the problem of corruption without improving the quality of the current system of international co-operation. II.
Obstacles
In this context, the participants were able to identify a
number of obstacles that create an impediment for international
co-operation: - differences in company laws and other related regulatory norms, in particular the possibility of setting up shell or letter-box companies lacking any commercial or industrial activity which often do not require minimum capital, audited accounts, annual general meetings or even a locally appointed administrator ; - the fact that such shell or letter-box companies are used for operating outside the territory of offshore centres where they have been created, rendering their control difficult or even impossible ; - the lack of means to identify the ultimate physical beneficial owner of shell or letter box companies ; - reluctance to sign, ratify or implement treaties on international co-operation in criminal and administrative matters ; - insufficient staffing and training of law enforcement personnel ; - insufficient knowledge about the patterns and methods of corruption transactions using offshore centres ; - the misuse of rules providing for bank secrecy, confidentiality, professional privilege and immunities. The participants acknowledged the efforts already made by the international community –European Union, Financial Action Task Force, OECD, United Nations, World Bank, Interpol - to overcome some of these obstacles, but recognised that there was still an urgent need for defining better adapted international standards and ensuring compliance with already existing ones. However, they considered that inviting offshore centres to comply with such standards requires that onshore countries do likewise themselves. III.
Measures to be taken at national level
1. Company laws should be brought into line with international « due diligence » standards established by e.g. the Basle Committee, the Financial Action Task Force, the European Communities requiring, inter alia, the identification of customers, record-keeping, reporting of suspicious transactions, etc 2.
Obligations should be
established for intermediaries, such as lawyers, accountants,
auditors, company formation agents and trustees to require them to
comply with minimum professional standards as well as to report
suspicious transactions and any other information related to
slush-funds necessary for tracing the corruption trail.
Effective, proportionate and dissuasive criminal or administrative
sanctions should be attached to the non-respect of such obligations. 3. Bank secrecy should never be an impediment in criminal investigations and procedures should be established for lifting, without delay, bank secrecy at the request of competent foreign or domestic law enforcement authorities. 4. No company should be registered in offshore jurisdictions before obtaining and verifying detailed information about the identity of the ultimate physical beneficial owner and the effective responsible manager, the activities of the company, reliable bank or company references, criminal records, etc. 5. Financial institutions should consider as 'suspicious' for the purpose of their reporting obligation, the involvement in a transaction of a shell or letterbox company established in an offshore jurisdiction which does not take the measures described above. 6. Law enforcement personnel should be trained by specialists in the banking and auditing sector concerning the establishment, operation and possibilities of misuse of offshore shell and letterbox companies. 7. Services dealing with international co-operation in all jurisdictions should be adequately equipped and have sufficient staff and resources at their disposal; 8. Research should be carried out on the financial circuits used by corruption proceeds in particular with regard to offshore facilities and accounts. 9. Professionals dealing with the formation and management of companies and trusts should be effectively regulated – including, where appropriate, through compulsory membership of professional associations – and subject to codes of conduct and disciplinary rules. 10. Financial institutions dealing with asset management should test their vulnerability to abuse in corruption transactions. 11. Decisions concerning the opening of accounts for political decision-makers and elected representatives should be handled by high ranking and specialised management personnel. 12. No bank account should be opened on behalf of shell companies without approval by a specialised department of a bank or other financial institution. IV.
Measures to be taken at international level
The
participants expressed serious concern at the difficulties encountered
in obtaining information and assistance from foreign jurisdictions,
notably from many offshore ones, in the investigation and prosecution
of corruption offences. In this respect they invited international
organisations to devise without delay instruments, procedures and
mechanisms of international co-operation which are necessary for the
criminal justice systems to react adequately to transnational economic
crime. In particular, 1. International co-operation should be enhanced through the use of available instruments, recommendations and initiatives developed by international organisations such as the Council of Europe, the European Union, OECD, United Nations, FATF, Interpol, etc.; 2. In this context it seems necessary to speedily implement the decisions of the recent extraordinary European Council of Tampere to reinforce the fight against serious organised crime by setting-up a special unit of prosecutors, magistrates and police officers in order to facilitate co-ordination of trans-national investigations, to develop common standards to prevent the use of corporations and entities registered outside the jurisdiction of the Union in the hiding of criminal proceeds and in money laundering and to provide for arrangements with offshore centres with a view to ensuring efficient and transparent co-operation in mutual legal assistance following the recommendations made by the FATF; 3.
Welcomed the launching of the
activities of the “Group of States against corruption – GRECO”
and invited member States and non-member States of the Council of
Europe to join this Agreement, which will constitute an effective tool
against corruption in all jurisdictions covered by GRECO's mutual
evaluation procedures; 4. Negotiations should be launched on the drafting of a Protocol to the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS n° 141) for the purpose, inter alia, of: - strengthening means of international co-operation e.g. through Financial Intelligence Units ; - reducing grounds of refusal in mutual assistance proceedings, including that of fiscal offences ; - implementing 'due diligence' regulations in offshore centres; 5. Strongly urged Council of Europe member States, which have not ratified the Additional Protocol (ETS n° 99) to the 1959 European Convention on Mutual Assistance in Criminal Matters (ETS n° 30) to do so without delay and invited all Council of Europe member States to sign and ratify the Civil Law Convention on Corruption (ETS N°174); 6. Invited the Council of Europe to update the European Convention of Mutual Assistance in Criminal Matters, simplifying the procedures of rogatory letters, providing for direct contact between judicial authorities and reducing the grounds for refusals of assistance; 7. Invited the Council of Europe to examine the possibility of drafting a European Convention on tax fraud, with the view to harmonising their domestic law provisions and to eliminating or reducing obstacles to mutual legal assistance in this area; 8. Invited the Council of Europe to consider ways of providing for more expeditious and efficient extradition procedures among its member States; 9. Invited the Council of Europe to promote awareness and training about its instruments dealing with international co-operation, in particular the Convention on laundering, search, seizure and confiscation of the proceeds from crime and the Conventions on corruption, among judges, prosecutors and staff of central authorities in its member States; 10. Urged international organisations to follow-up and facilitate progress in the adoption and implementation of the measures described in the present conclusions, keeping in mind the pressing need to respond adequately and efficiently to the threat that transnational corruption poses to the functioning of democratic societies. [1] Albania, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Russian Federation, the Slovak Republic, Slovenia, “the former Yugoslav Republic of Macedonia” and Ukraine
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